NATIONAL UNIVERSITY OF SCIENCE

AND TECHNOLOGY
GRADUATE SCHOOL OF BUSINESS

FINANCIAL MANAGEMENT AND

POLICY (GMB 5268)
LECTURER

MR F. CHINJOVA

AIM:
To provide students with an understanding of the principles, concepts and techniques used in
making financial management decisions.
To ensure that the students understand the concepts behind available theoretical models and
can assess the relevance of developments in financial management theory to an enterprise.
To provide an ability to select the techniques most appropriate to optimize the employment of
resources
To ensure that students understand the workings of the financial system and evaluate
alternative sources of fianc and assess investment possibilities.
To appreciate the treasury management function, the working capital aspects.
COURSE OBJECTIVES
At the end of the course students should be able to: Communicate the consequences of financial management decisions to accountants and non
accountants.
Analyse financial problems
COURSE OUTLINE
1. Goals and Functions of Finance
Role of Financial Manager, investment decisions, financial decisions, dividend decisions,
organizing the finance function, financial objectives, relationships between an organisations
shareholder, management, lenders, customers, suppliers, employees.
2. Financial Sector of the Zimbabwe Economy
The Zimbabwe Financial Markets, money and capital markets, the role of Stock Exchange.
3. Methods of Raising Equity Capital
Cost of new issues, Rights, issues, Pricing new issues, Scrip dividends and Scrip issues,
Venture Capital etc, long term, medium term and short term financing determining the choice
of each type of finance, obtaining external long-term financing, common stock (ordinary
shares), fixed income securities, debts and preferred stock, lease financing.
4. Concepts in valuation
The time values, internal rate of return (IRR), bond returns, the return from a stock
investment and dividend discount models measuring risk (the standard deviation) and asset
based methods.

5. Market Risk and Returns

Efficient financial markets, security portfolios, multiple security portfolio analysis and
selection, Capital Asset Pricing Model (CAPM), expected return for individual security.
6. Capital Investment Decisions
Capital budgeting techniques, average rate of return, payback, internal rate of return, net
present value, replacement decisions and depreciation, capital rationing, profitability index,
sensitivity analysis.
7. Dividend Policy
Definition of dividend policy, factors influencing dividend policy cash dividend stock split,
share repurchase, dividend policy irrelevancy debate, dividend policies.
8. Working-Capital Management
Components of working capital, cash, marketable securities, accounts receivable, inventories,
short-term financing.
9. Tools of Analysis and Forecasting
Financial ratio analysis, liquidity ratios, debt ratios, coverage ratios, profitability ratios,
usefulness and limitations of ratios, financial planning, sources and uses of funds, cash
budgeting. Profit planning, cost structures of the firm, relationship between costs, volume
and profit.
10. Mergers and Acquisition
Conglomerates, horizontal and vertical mergers, bids and take over tactics.
READING LIST
ESSENTIAL READING
1. James C. Van Horne: Financial management and Policy, latest edition (Prentice Hall)
2. J.M. Samuels, F.M. Wilkes: Management of company Finance (Chapman and Hall)
3. R. Brealey and S. Meyers: Principles of Corporate Finance (McGraw-Hill)
4. Zimbabwe Stock Exchange Publications
REFERENCES
1.
2.
3.
4.

C.Correia an D. Flyn: Financial Management, latest edition (Juta)

R. Dixon: Financial Management (Longman)
J.F. Weston and T.E. Copeland: Managerial Finance
A.G. Puxty and J.C. Dodds: Financial Management, Methods and Meaning (Van

5.
6.
7.
8.

Nostrand Reinhold)
J.R. Franks and J.E. Broyles: Modern Managerial Finance (John Wiley)
C. Higson: Business Finance (Butterworths)
J.F. Weston and E.F. Brigham, Managerial Finance (The Dryden Press
R.G. Schultz and R.E. Schultz: Basic Management: Texts, Problems and Cases
(Intext Educational Publishers)

NATIONAL UNIVERSITY OF SCIENCE

AND TECHNOLOGY
GRADUATE SCHOOL OF BUSINESS

MANAGERIAL ECONOMICS (GMB 5163)

LECTURER

MR F. CHINJOVA

AIM:
To provide students with an understanding of the principles concepts and techniques used in
making optional decisions in managerial economics.
To ensure that students understand and critically evaluate business alternatives that may not
necessarily optimize profits and other objectives of the firm.
COURSE OBJECTIVES
At the end of the course students should be able to: Apply analytical tools in solving organizational problems in business
Able to make optional business decisions
Able to critically evaluate business alternatives that are not maximizing profits.

COURSE OUTLINE
1. Introduction
Definition of managerial economics;
Methodology of managerial economics
Scope and links of Managerial economics with other disciplines
Business organization
2. Business objectives and models of the firm
The Neo-Classical Model
Sales maximization model
Utility maximization model
Profit maximization rate of growth model
Behavioural model
The concept of x-inefficiency
3. Theory of consumer behavior an market demand
Consumer preferences and choice
Consumer behaviour and market demand
Market demand analysis under perfect competition i.e PED, YED and CED.
Determination of price in the market
Functions of price
4. Production and determination of costs
Theory of production
Theory of costs
5. Formal Models of Market Structures
Perfect competition
Pure monopoly
Monopolistic competition
Oligopoly
6. Risk and Uncertainty
Applications of economics of information
The problem of moral hazard
Asymmetric information
7. Game Theory in decision making
8. Investment Decisions and Cost of Capital
Weighted average cost of capital (WACC)
Investment appraisal techniques i.e payback period, Net Present Value,, Internal rate of
Return and Accounting Rate of Return

RECOMMENDED TEXTS
Chiang A.C (1984): Fundamental methods of Mathematical Economics, 3rd Edition.

Davies, H. (1991): Managerial Economics for Business and Management Accounting,

Pitman, London, UK.
Hill, S. (1989): Managerial Economics: The Analysis of Business Decisions, MacMillan,
London, UK.
Koutsoyiannis A. (1994): Modern Micro Economics, 2nd Edition, MacMillan, London, (Mode
UK).
Webb, S.C (1976): Managerial Economics, Houghton Mifflin Company, Boston, USA.
Paul G. Young Managerial Economics for decision makers : 4th Edition
H.K. Peterson Managerial Economics
Baumol W. What can economic theory contribute to managerial economics? American
Economic Review, 51 (2) May 1961 pp142-146.
Bourdon E.Pricing Strategies in highly competitive markets, Management Decisions, 30
No14, 1992, pp57-64.
Earl P.E. Behaviourial analysis of demand analysis.Journal of Economic Studies, 13 No 3,
pp20-37.
Harrison E.F. Interdisciplinary models of decision making, management decision 13, No 8,
pp27-33.
Hirshleifer J. Investment decision under uncertainty, choice theoretic approach, Quarterly
Journal of Economics, November 1965, pp509-536.
Longman J.R. and BakashN. IRR, NPV and Payback period and their relative
performance in common capital budgetary decision procedures for dealing with risk,
Engineering Economist, 39, Fall, 1993, pp17-47.
Wolinsky A. Price as signals of product quality, Review of Economic studies, 50, October
1983, pp647-658.